Top European nations raise taxes, cut spending to boost economies

Major European economies are struggling with debt and slow growth and are following in America’s footsteps in making amends to their budgets. The UK is raising taxes, France is doing the same and reducing spending, and Germany is facing budget cuts as well.

Britain’s new Labour government recently proposed a $52 billion tax increase, the largest in a generation. Its first female chancellor of the exchequer, Rachel Reeves, said the budget aims to cover the “black hole” left by the previous government.

Former Prime Minister Rishi Sunak criticized the plan as a heavy borrowing spree.

Most taxes target employers, inherited wealth, capital gains, foreign workers, private schooling, and private jet flights. Spending will increase for the National Health Service and public schools. The national minimum wage was raised to about $16 per hour.

In France, the government has implemented austerity measures to control its debt, which hit one of the highest levels in Europe. The goal is to gradually reduce spending and save around $65 billion in 2025.

Germany has reduced spending. It narrowly avoided recession and saw a 0.2% growth in GDP. The government is debating its budget, with political disagreements over whether to increase investment or stick to strict debt limits. It may even threaten coalition stability and trigger early elections.

In contrast, the US economy saw a 10.7% rise since before the pandemic. France’s rose by 3.7% and Britain’s by 2.9%.